Fixed deposit and Sukanya Samriddhi Yojana (SSY) are two popular investment tools. But if you want to know which is better for you, you need to make a detailed comparison between Sukanya Samriddhi Yojana vs FD.
The Sukanya Samriddhi Yojana is a government scheme launched for the welfare of a girl child in the family. It encourages parents or guardians of the girl child to make small savings for her higher education and marriage expenses.
This scheme, launched under the ‘Beti Bachao, Beti Padhao’ initiative, enables parents/legal guardians of a girl child to open an account in her name. This account can be opened until she turns 10.
Like fixed deposits, this savings scheme offers guaranteed returns to all depositors. However, the two investment tools have multiple dissimilarities. Read on to dive deeper into understanding Sukanya Samriddhi Yojana vs FD.
The below table points out the key differences between Sukanya Samriddhi Yojana and fixed deposit.
Parameters |
Fixed Deposit |
Sukanya Samriddhi Yojana |
Interest Rate |
Interest rates depend on the tenor you choose |
8% |
Eligible Age |
18 years (Parent/guardians can open FD accounts for minors) |
Birth |
Minimum Deposit |
Differs from bank to bank |
₹250 |
Maximum Deposit |
No upper limit |
₹1.5 Lakhs p.a. |
Tax Exemption |
Annual deduction of up to ₹1.5 Lakhs under Section 80C |
Annual deduction of up to ₹1.5 Lakhs under Section 80C |
Tenor |
Differs from bank to bank |
When the girl reaches 21 years or upon marriage |
Premature Withdrawal |
Premature withdrawal is allowed; however, banks and NBFCs charge a penalty |
After five years; however, under certain conditions only |
Nomination Facility |
Available |
Not available |
Loan Facility |
Available |
Not available |
Extension of Tenor |
Not available, however, you can always renew your FD |
Not possible |
Disclaimer: Rates mentioned above are subject to change as per the policies of the issuers
Fixed Deposit and Other Investment Comparisons |
||
|
Both Sukanya Samriddhi Yojana and fixed deposits have their own set of pros and cons. Whether you should opt for SSY or FD depends on your individual preferences, circumstances, and needs.
The interest earned on regular FD is taxable if it exceeds ₹50,000 annually.
You can avail income tax exemption of up to ₹1.5 Lakhs on interest earned through the Sukanya Samriddhi Yojana account in a financial year.
The minimum deposit amount for Sukanya Samriddhi Yojana is ₹250, and the minimum amount for FD varies from bank to bank.
The banks do not offer differential interest rates for a girl child. However, some banks offer FDs specially designed for the girl child.
The Sukanya Samriddhi Yojana is one the best small savings schemes available for the girl. However, when making an investment for your child’s future expenses, you can diversify your portfolio by investing in FDs, children’s mutual funds, etc.